Netflix Bought Roku?

The history of cooperation between these two platforms is quite long and interesting. One way or another, throughout its existence Roku constantly collaborated with Netflix. It was a mutually beneficial collaboration that generated significant profits for both parties.

But lately, the streaming company Netflix has not been doing so well. In particular, experts have noted a significant drop in the number of subscribers and a decline in the rating of this platform. The result is lower than expected and shows a loss of 200,000 subscribers for the second quarter of 2022, the first drop in paying users the service has recorded in a decade. According to the company, the biggest offenders were password sharing between users who share accounts and increased competition.

So, Netflix executives are looking for new growth opportunities.

While losing subscribers, Netflix is looking at new ways to make money. Roku advertising revenues are seven times higher than phone revenues. One can only imagine how profitable this business is.

Two important entertainment companies may soon be together. An expert report claims that Netflix could buy Roku. Negotiations will come at a difficult time for both because of falling stock prices and lower-than-expected business performance. And the advertising business could be the reason for the union.

The company has closed the window for its employees to sell the company’s stock. Normally this is allowed at any time, but Roku has vetoed this possibility. This often happens when a company is about to release details that could have a big impact on its stock price. It’s also a way to avoid so-called “insider trading,” where employees use insider information to trade their securities and make improper profits.

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In its latest earnings report, Netflix said it lost subscribers for the first time in a decade. That number alarmed investors. The company was looking for ways to boost profits. One way would be to limit the number of screens per account. Netflix credits password sharing as one of the reasons it stopped growing. However, tests of pay-per-subscription sharing have not been approved.

According to the company, despite high household penetration, a large percentage of families who watch Netflix content still share accounts across homes. It is estimated that more than 100 million additional households use Netflix for free.

Another way out is to advertise on its streaming service. Competitors are following this path as well. Roku’s experience is welcome. As of the second quarter of 2022, the company earned seven times as much from advertising as it did from phone sales.

In addition to better understanding this market, Roku is also falling. The company’s stock is down 80 percent from July 2021 to the present. Thus, this would be the perfect time to acquire Netflix.

For now, the intrigue continues to be an intrigue. It is likely that the two popular entertainment companies will soon merge the advertising segments of their businesses on mutually beneficial terms.

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